Hats off the Starbucks and Square – making mobile payments history together!

Yesterday’s press release announcing Square’s payment partnership with Starbucks is significant for multiple reasons.

1. Starbucks is the only true US mobile payments leader today; any move they make regarding mobile payments is truly news-worthy.
2. Square’s actions are equally note-worthy because in just three years they have disrupted the card payment acceptance and business management space for small businesses.
3. There is a card processing cost savings for Starbucks and a huge revenue boost for Square.

But I want to focus on what this partnership does for customers, the end-user:

Both Square and Starbucks stand out for their focus on customers and how well they understand the importance of nailing the end-user mobile experience.

When compared side-by-side, Square is the example to emulate when it comes to providing mobile apps that are a lot more simple, elegant and intuitive for the end-user.  The Starbucks app is good, but it requires the end-user to do more when it comes to purchasing and their scanners often don’t accurately read the bar code the first time.  The Starbucks Store Finder function is also difficult to use and often inaccurate; I have gotten lost more than once trying to follow its directions. So I am hoping that Pay with Square will make find my beloved coffee store easier in to find the fall!

I applaud the leadership of both companies for so brilliantly pursuing this partnership and see this deal as a potential win-win for everyone.  Square has expanded its reach and achieved major validation of its business model beyond the small business market. The company promotes consumer awareness of other Square merchants via its Pay with Square directory.  Starbucks adds in an even simpler payment method via Pay with Square and its GPS technology will alert baristas when you walk in the door to your presence, present your name and picture on the POS terminal to validate who you are and a simple “yes” to complete the purchasing process.  Like it!

(Perhaps the CEO of Verifone would like to take back his recent comment that compared Square to Pets.com?)

I also see a huge opportunity for Starbucks to catapult customer loyalty by leveraging Pay with Square and its own mobile app to personalize the customer purchasing experience regardless of geography.    Think about it, die-hard Starbucks customers are only known to the baristas in their “local” Starbucks by face, name and even coffee preferences.  This is a powerful loyalty enhancer, but it all goes down the drain when staff leaves or when purchasing coffee at a different location.  This does not have to happen now! Both Starbucks and Pay with Square apps are tied to a person and their credit card.  They have, or will have the data about you and your purchasing preferences and can use that information to drive loyalty and the purchasing experience through the roof.

Think about how powerful and rewarding it would be if loyalty and purchasing preference history was never lost nor limited by geography?  What if you could walk into any into any Starbucks store; Square’s GPS technology immediately alerts baristas to your presence, your name and purchasing history.  The barista greets you by name and asks you if you would like the Grande, skinny no foam latte today and all you have to do is say yes and your purchase is complete.  How awesome would that be?  Your loyalty is never lost and recognized regardless of physical presence!

I have only one other app recommendation for Starbucks and Square that would make the customer experience complete:

Please add an option to the apps that allows mobile buyers to add a tip for the server at the time of purchase.

The simplicity of both apps comes from needing only your cell phone to buy a cup of coffee; which means no wallet or cash.  Perhaps the inability to add a tip is driven by tax implications, but the sad reality is that I tip less because I think about using my mobile phone to buy coffee; I frequently forget to grab some dollars before entering the store!

I think that this totally short changes the Starbucks staff and often leaves me feeling guilty for not remembering to bring some cash with me.  I don’t think Starbucks wants my parting emotion to be about guilt – so please think this one through so that it is a win-win for everyone.

Other than that one flaw, my hat is off to both Starbucks and Square.  You both remain the example to follow in terms of mobile payments with superior end-user applications.  Bravo!